IRB Infrastructure Developers : AHMEDABAD VADODARA EXPRESSWAYANNUAL REPORT

AHMEDABAD VADODARA EXPRESSWAY

UDAIPUR SHAMLAJI

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ROLLING MILES

AND CREATING

SMILES FOR THE

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ANNUAL REPORT 2022-23

MEERUT BUDAUN HIGHWAY

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Contents

Corporate overview

2 Chairman's message

6 25 Years of Engineering Growth and Innovation

1. Company overview

1. Our iconic project

1. Milestones

1. National footprint

1. Project portfolio

30 Highlights of FY23 and performance in the last 25 years

1. Private InvIT & Public InvIT

1. Our strength

1. Sustainability

1. Awards
2. Board of Directors
3. Management team
4. Corporate information

Statutory reports

1. Management discussion and analysis

1. Board's report

1. Corporate governance report

Financial statements

1. Consolidated financials

1. Standalone financials

330 Information of subsidiaries/associate Ccompanies/joint ventures (AOC-1)

For more details on our ongoing projects and company visit our website: https://www.irb.co.in/home/investors-contact/

 Karwar-Kundapura NH17 Highway

With the unwavering support of our nation, IRB Infrastructure Developers Ltd. overcame challenges, achieved success and grew into the thriving business we are today. We have always taken pride in creating a positive impact and connecting this nation while expanding our horizons.

In the late 1990s, an aspiring civil engineer by the name of Virendra Mhaiskar embarked upon a journey to establish a Company that would transform the landscape of highway infrastructure within India. His visionary ambition and fervour for development and growth culminated in the founding of IRB Infra, which is dedicated to revolutionising and establishing itself as a pre-eminent player in the realm of Indian highway infrastructure. Through the years, the Company has thrived and expanded, constantly taking on more challenging and impressive projects while setting new benchmarks for quality and innovation. Amidst various endeavours, IRB upholds its core values of integrity, sustainability, and innovation while utilising cutting-edge technology to minimise environmental impact and provide lasting value to clients and communities.

With 25 years of hard work and dedication, IRB Infrastructure Developers Ltd stands tall as a symbol of India's transformation.

CHAIRMAN'S MESSAGE

Jubilee Year - IRB Group with 3 listed entities and market capitalisation in excess of K 36,000 Crores

Strategic Overview		Statutory Reports		Financial Statements

The toll revenue that IRB group has collected across the listed company and the two InvITs was close to J 5,000 Crores, which is around eleven percent market share of the total toll revenue collected across India.

VIRENDRA D. MHAISKAR

Chairman and Managing Director

Dear Stakeholders,

Following a humble beginning in the year 1998, IRB went on to list in the year 2008. 25 years later, with immense support from all stakeholders, IRB Group today has 3 listed entities, an Asset base of around I 70,000 Crores, 13,739 lane kms under management, 20% share of India's Golden Quadrilateral, 37% market share of TOT projects across the country and enjoys the backing of marquee Investors (Cintra and GIC) to help it realise its growth potential.

Presently, we operate 64 toll plazas, service 736 FASTag lanes and cater to more than 1.3 million vehicles on

a daily basis.

We are pleased to share an interesting data point that we recently came across. Gross toll collection across India for the Financial Year 2023 was approximately

H 48,000 Crores. The toll revenue that IRB group has collected across the listed company and the two InvITs was close to H 5,000 Crores, which is around eleven percent market share of the total toll revenue collected across India. This number is growing at robust pace with increasing traffic, tariffs and the addition of new assets.

Global developments including geopolitical escalation and recalibration of supply chains have led to a significant increase in inflation across the globe including India. This has been a threat to all businesses across the world. Fortunately, for IRB, Inflation-linked tariff revision acts as a natural hedge against interest rate hikes. For example, the Ahmedabad-Vadodara BOT project and nine assets of the Private InvIT received a tariff revision of ~10% in line with inflation from April 1, 2022. During the current financial year, we have also witnessed good traffic growth across the portfolio. The combination of tariff revisions and traffic growth has enabled us to deliver an improved performance in the financial year under review.

We are pleased to inform you that we have successfully achieved completion for all the nine projects that were transferred to the Private InvIT in the initial phase.

Following the completion of the Kishangarh-Gulabpura and Hapur-Moradabad projects the toll rates for these SPVs have seen an increase of 78% and 65% respectively. As most of the assets of Private InvIT have achieved completion, we expect to receive regular pay- out from Private InvIT to IRB from the financial year.

Successful award of two projects enhancing visibility of growth

Taking forward the growth momentum, we bagged two projects during the financial year, i.e. the upgradation project for 6 laning of NH27 from Samakhiyali to Santalpur having a project cost of H 2,132 Crores and concession life of 20 years on BOT basis from NHAI in the state of Gujarat. The project will be funded by debt of approximately H 1,450 Crores and balance through equity and internal accruals (IRB's share of equity is less than H 300 Crores).

The second award is for a prestigious project in the state of Telangana. The scope encompasses TOT for the Hyderabad Outer Ring Road (ORR) project comprising an 8-lane highway, starting at kilometre 0 at Narsingi junction and ending at kilometre 158 at Gachibowli in Hyderabad, in the state of Telangana on upfront payment of H 7,380 Crores for a concession period of 30 years. The total Capex will be H 8,362 crores which will be funded by debt of H 5,500 Crores and balance through equity

We are pleased to inform you that we have successfully achieved completion for all the nine projects which were transferred to the Private InvIT in the initial phase.

of H 2,862 Crores. Since the project is to be executed through the Private InvIT, IRB's share will be close to

H 1,500 Crores and the remainder will be contributed by our financial partner (GIC).

The total order book of the Company as on June 30,

2023 is H 33,708 Crores including the Hyderabad ORR project. EPC order book is close to H 8,423 Crores providing good revenue visibility for the next 2-3 years for the construction segment and further bolstered by a 3 years' executable O&M order which is close to H 2,500 Crores to H 3,000 Crores. This marquee Hyderabad TOT project not only provides visibility for toll revenue but also adds a significant long-duration O&M order book which provides visibility for the construction segment as well.

Return optimisation strategy with optimal debt equity mix

Following the raising of growth capital in the prior financial year, we have repaid debt and significantly reduced leverage. On a consolidated basis, the debt-equity ratio is less than 0.8:1 which is one of the best for asset developers in the sector. Further, CRISIL has upgraded the rating of the Company by a couple of notches. This has led to a change in the Long term rating from A to AA-.

Leveraging the strengthened financial position and improved rating, in line with our return optimisation strategy, we have refinanced 3 BOT project SPVs i.e. Solapur-Yedeshi,Yedeshi-Aurangabad and Udaipur-Shamlaji of the Private InvIT, reducing/fixing the rates for 5 years. We will be saving an additional cash surplus of I 550 Crores over the period of 5 years.

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CHAIRMAN'S MESSAGE

Strategic Overview		Statutory Reports		Financial Statements

Strategy of monetisation of HAM assets

As part of our strategy to monetise HAM assets upon completion, we have successfully transferred the VK1 HAM project to the Public InvIT in this financial year. We have received a consideration of H 342 Crores which is close to 1.2 times of the book value. The Public InvIT received an overwhelming response from its unitholders for the acquisition of the VK1 HAM project. For IRB, the consolidated debt reduced by H 955 Crores with debt for this project also getting transferred to the buyer.

Continue to undertake pioneering initiatives in the sector

We are pleased to inform you that our private InvIT has been listed on NSE on April 3, 2023 in line with the SEBI InvIT regulation which requires the listing of all InvITs. On the day of listing, the trust had 10 assets spread across

7 states of India which had a balance average concession life of around 21 years with total enterprise value of more than H 28,000 crores and equity value of over H 18,000 crores.

With this listing of IRB Infrastructure Trust, all three entities within the IRB Group are now listed. The combined market cap of all three entities is more than H 36,000 crores and the

Our business vision is deeply connected to sustainable growth, emphasising environmental preservation, efficient resource utilisation, and reduced ecological impact.

ESG in Action

IRB Infra is driven by a steadfast commitment to the triple bottom-line approach, that encapsulates social commitment (people), environmental responsibility (planet), and financial performance (profit).

We prioritise sustainability through innovative practices, executing large-scale projects while adhering to sustainable principles. Our business vision is deeply connected

to sustainable growth, emphasising environmental preservation, efficient resource utilisation, and reduced ecological impact. By adopting ESG principles, we focus on energy conservation, implementing energy-efficient processes, and transitioning to renewable energy sources to contribute to decarbonisation.

Outlook

With the continued thrust on infrastructure and asset creation by the Government, we see a steady pipeline of opportunities arising across the landscape. IRB will selectively bid for BOT, TOT and HAM projects in that order of preference. From an execution standpoint, BOT and TOT projects will be housed in the Private InvIT which is the development platform of the Group. Any HAM assets will be housed in IRB during the construction phase and will be monetised post-completion. The Public InvIT will enjoy the right of first refusal for the HAM Assets. The EPC and O&M of all the projects will be undertaken by IRB.

This uniquely designed operating model reduces the capital requirements for IRB Infra to 51% of the Equity Component as 49% of the equity component is contributed by GIC Affiliates, our partner in the Private InvIT. Further, with the monetisation strategy we can continue to unlock capital and churn it into future projects. In addition to our strong financial position, the favourable outlook for both toll revenues and our construction business will provide further resources for growth. Needless to say, your Company is

uniquely positioned in the sector with an unmatched track record, a differentiated business model and an elevated financial position.

On this momentous occasion of our Company's 25th anniversary, we extend our heartfelt gratitude to our esteemed shareholders. Your unwavering support and trust in our vision have been instrumental in propelling our growth and success over the years. Together, we have overcome challenges, celebrated milestones and embraced opportunities to shape the trajectory of our organisation. Your continued investment and belief in our mission have empowered us to innovate, expand, and create lasting value. We deeply appreciate

your commitment and partnership, and we look forward to embarking on the next chapter of our journey, fortified by your unwavering support. Thank you for being an integral part of our remarkable 25-year journey.

Regards,

VIRENDRA D. MHAISKAR

Chairman and Managing Director

gross debt for all three entities is less than H 26,000 crores. The implied debt to market capitalisation for the group

is very low, i.e. 0.7x on gross debt level. This validates the position of IRB Group that it is well-capitalised and has the requisite muscle to undertake large-scale projects enabling it to deliver superior growth.

As per the dividend policy of the Company, the Board has declared total dividend of 20% on face value of equity shares H 1 each taking the aggregate dividend pay-out for the current financial year to H 120 crores.

With the participation of two marquee strategic/financial investors since FY21, viz. US Headquartered Infrastructure behemoth, Ferrovial group, through its subsidiary Cintra and sovereign wealth fund, Singapore GIC Affiliates. This not only strengthened our financial position but also facilitated the adoption of global best practices and elevated our standards of governance. It is worth noting that IRB Group maintains

a robust governance policy, meticulously driven by our esteemed Board.

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Highway Projects across 11 Indian States

13,739 Lane Kms

Under operations

~K 70,000 Crores

Asset base

37%

Share in India's TOT Space

Our commitment and focus on ESG has yielded significant improvement in our ESG rating in the current financial year by two rating agencies i.e. S&P Global & Sustainalytics and scores are as under:

Name of the ESG Rating agency		Criteria		Current Year		Previous Year
S&P Global		Higher - Better	31	7
Sustainalytics		Lower - Better	33.5	44.5

20%

Share in the Golden

Quadrilateral Project

Catering to around

13,00,000 plus

Vehicles every day

A to AA-

Rating Improved

64

Toll plazas

736

FASTag compliant lanes

~K 550 Crores

Cash flow Saving after Refinancing 3 Projects of Private InvIT

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25 YEARS OF ENGINEERING GROWTH AND INNOVATION

Strategic Overview		Statutory Reports		Financial Statements

PIONEERING FEATS of IRB

Over the course of this journey, the Company has achieved pioneering feats; accomplishments that fill its stakeholders with a sense of pride and gratification:

First Build-Operate-Transfer (BOT) project

First to operate and maintain India's first Expressway BOT project with upfront payment of US$ 112 mn (` 918 cr) to MSRDC in 2004 up to that time

First revenue sharing basis (38%), Surat Dahisar BOT project in 2008 with NHAI, the nodal agency

• Kailthal-RajasthanNH 152/65

IRB Infra is a leading and the largest integrated multinational player in India's highways infrastructure with a staggering operational expanse, poised to bolster its already impressive footprint in the sector. We take great pride in our status as the largest BOT highway project operator in India. Our portfolio of successful undertakings includes the Mumbai-Pune Expressway, Ahmedabad-Vadodara Expressway, Nehru Outer

Ring Route, etc.

We introduced innovative financing and maintenance approaches for Toll Roads. We have taken proactive measures to expand our repertoire through strategic acquisitions, partnerships, and foraying into emerging industries. IRB has been honoured with numerous prestigious awards and accolades and these include being lauded as the Best Highways Infrastructure Developer. Furthermore, the Company enjoys a coveted position in the esteemed Fortune India 500 list.

IRB Infra is dedicated to prioritising safety and sustainability and has implemented a strict health and safety management system to ensure responsible

work practices, while also using environment-friendly materials and sustainable design practices to reduce its environmental impact. We continue to promote sustainable development through initiatives such as installing solar panels, recycling construction waste, efficient water consumption and planting trees to reduce carbon emissions.

IRB Infra's journey of 25 years has been marked by our steadfast commitment to growth, innovation, and excellence. Throughout this time, we have dedicated ourselves to the development of our nation, contributing to its progress and prosperity. As we celebrate our Silver Jubilee year, coinciding with India's Platinum Jubilee year, we take immense pride in our accomplishments and the impact we have made on the infrastructure landscape. We have overcome challenges, embraced opportunities, and continuously strived to deliver excellence in all our endeavours. Looking back, we are grateful for the support and trust bestowed upon us by our clients, partners, and stakeholders. As we move forward, we remain resolute in our vision to drive growth, foster innovation, and continue making a positive difference in the infrastructure sector.

First listed Private InvIT in Roads & Highways segment set up in 2020 with investment up to US$ 535 mn (` 4,400 cr) from GIC affiliates (49% stake partner in 9 asset portfolio)

Bagged Largest TOT involving first highest committed payment of US$ 1 bn (` 8,262 cr) to MSRDC in March 2020

Largest TOT portfolio with a 37% market share in awarded TOT projects across India as on date

First launched and listed Infrastructure Investment Trust in India

First Indian Highway Infrastructure Company to

tap offshore bond markets

First project with highest upfront payment of

US$ 61 mn (` 504 cr) to NHAI in 2008 up to that time

First BOT developer to integrate

'Toll Management System' with SAP in March 2016

Note: USD Exchange rate as on 31 March 2023

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